GIC inks deal for $1.65b-worth stake in US power lines operator

It’s buying 19.9% of shares in ITC from Fortis.

GIC Pte, Singapore’s sovereign wealth fund, has bagged a 19.9% stake in US power lines operator ITC Holdings Corp. from Fortis Inc. for a whopping US$1.228b (roughly $1.65b).

According to the joint announcement by the three companies, the financing of the acquisition has been structured to allow Fortis to maintain its investment-grade credit rating.

GIC will be granted certain customary minority rights in connection with its investment in ITC once the deal closes.

Moreover, the acquisition is slated to close in late 2016. The closing of the agreement is subject to ITC and Fortis shareholder approvals, certain regulatory and federal approvals, as well as other customary closing conditions.

"We believe this is an attractive opportunity to partner with Fortis to invest in ITC,” commented Rhys Evenden, Head of Infrastructure for North America at GIC.

“Given the high quality transmission platform ITC offers, the strength of the Fortis management team, and GIC’s long-term approach to infrastructure investing, we look forward to a successful transaction and partnership,” Evenden added.

The agreement comes on the heels of the announcement last February 9 that Fortis will acquire ITC. This transaction was valued on announcement at around US$11.3 ($15.2b). With GIC’s acquisition of a 19.9% stake in ITC, Fortis closes the doors on a hefty component of its own acquisition financing of ITC.